The average rate on the 30-year loan has been below 4 percent all year. It has fallen further since the Federal Reserve started buying mortgage bonds in September to encourage more borrowing and spending.
Low mortgage rates have helped boost sales of newly built and previously occupied homes this year. Home prices are also increasing, and builders are more confident and starting work on more new homes.
Lower rates have also persuaded more people to refinance. That usually leads to lower monthly mortgage payments and more spending. Consumer spending drives nearly 70 percent of economic activity.
Why do I think we will eventually have massive defaults by the same people who shouldnt be home owners in the first place when their variable mortgages do go up to 7% or so? Are we going to "forgive them" and do another affirmative action move and we taxpayers get bent over again? Or,second scenario......Homelessness rises, people in lower income areas just give up on paying at all, and gang violence goes haywire. Not pretty either way. Ive been trying to organize a coalition for that fatefull day, but it seems no one on the Internet seems to mind that we have all these people yelling you owe me, your great great granfather promised me this and that and you owe me. Arent we tired of paying the bills for them? Im 52 years old, followed economics for 20 years, and there hasnt been a black swan event in a long time. The 2008 housing debacle was nothing. I believe Affirmative action and the excuses people will make up..backed by civil rights lawyers will bring this nation to its knees. If you watch Gangland or Lockdown on Netflix, how can you disagree? We wont even be able to pay the bill on what our "Border wars" are costing us soon.
Where do I begin? Man. The banks sold anyone who wanted a home, having a job or not, just sign here its yours. And at the same time they took out credit default swaps with AIG.. not knowing their 'end of world bet' would go bankrupt on them.
Then as everyone began to default on the bank, the bank was exposed to having all its eggs in real estate loans. Which then triggered a bailout until the bank could unload these cheap homes to people like me for 10 cents on the dollar.
I agree eventually the prices will rise again and with 3% my chances are prtty good.